Many conservatives are in favor of privatizing the USPS instead of it being government run because they believe privatization will create a more competitive and innovative postal service. Others see this move as dangerous and fear it would be more about making money than helping the public.
Should we run our country for the benefit of We the People, or so that a few people can profit off of We the People? This is a question that is rising to the surface in a battle between those who want the United States Postal Service (USPS) maintained and expanded, and those who want it privatized.
There are some conservative ideologues who just can’t stand that the USPS demonstrates government doing its job of helping make our lives better. As with Social Security, they attack it relentlessly and endlessly.
The latest push to privatize the USPS came from the Elaine Kamarck at Brookings, in “Delaying the Inevitable: Political Stalemate and the U.S. Postal Service.” Kamarck writes:
The USPS exists right now in never-never land. It is not fully public and it is not fully private. It is supposed to compete and innovate but it is stifled by law and saddled with a governance structure that impedes innovation. It is time to decide its future.
Using the old “buggy-whip” analogy, Kamarck claims that much of what the USPS does is obsolete. Paper mail is “fading away” because of the Internet (“only” 23 billion pieces of first-class mail were sent last year). UPS and FedEx compete in parcel delivery.
Kamarck’s defines USPS’ dilemma as a “stalemate” in Congress that prevents lawmakers from passing legislation that would address the postal service’s challenges. (This stalemate is really between anti-government privatizers who want FedEx and UPS to take over all mail and package delivery, and the public who rely on the USPS and want it maintained and even expanded into new services like public banking.)
The “solution” Kamarck recommends is splitting the USPS in two. One part would be a public institution that delivers mail, and only mail, to everyone nationally. (This part is a reluctant nod to the pesky fact that a Post Office is mandated in our Constitution and popular with the public.) The other would be a privatized organization for parcel delivery, a business that would compete with (or, more likely, immediately dismantled and sold to) FedEx and UPS.
Of course, for the resulting public mail-delivery institution to “make money” off of the public, mail delivery would have to be cut way back. Saturday delivery would have to end. It would have to get rid of several mail-processing facilities, even though this would slow delivery. Other steps – layoffs, along with pay and benefit cuts for the workers who remain – would make the service more “efficient.” Over time, service would degrade and eventually this would all end badly for the public and the employees. (But, of course, that’s the point.)
The paper has been promoted in various media outlets as offering partial privatization as a sensible solution to a congressional impasse. In “Should the Postal Service be sold to save it?” at The Washington Post, Lisa Rein summarizes the Brookings paper:
“… with three Congresses in a row failing to pass legislation to help stabilize its finances, some lawmakers and policy experts have reached the consensus that it’s time for the government to sell the post office.
This group was limited for a few years to conservatives and Republicans in Congress. But now a Democrat at the centrist Brookings Institution, Washington’s premier academic think tank, is joining the privatization side, arguing in a new paper that Congress’s inaction requires that something be done.
Rein gives a nod to that pesky “We the People” part of this, writing,
The idea of selling off any part of the government agency for which Benjamin Franklin first served as postmaster general has drawn fierce opposition from Democrats in Congress and the still-powerful postal unions. Others say it would be politically untenable.
That’s another way of saying:
1) The postal service is mandated in the Constitution (“Ben Franklin”) because of its importance to democracy and commerce.
2) A lot of people who work there (“still-powerful unions”) would be forced into low-wage jobs if it is privatized, damaging communities and the economy.
3) The public wants it and they can still vote (“politically untenable”) – for now.
(Mentioning that Kamarck is “a Democrat” imbues bipartisan “credibility” on the privatization argument.)
Competes With Private Sector
The meat of Kamarck’s argument is not really “stalemate.” The real argument arrives on page 8: The USPS competes with “the private sector.” In our current economic system We the People providing things that make all of our lives better is not desirable because this competes with the ability of a few already wealthy people to profit by providing those same things (but only to those who can afford it). So in our system We the People are prevented from providing for ourselves, saying this “unfairly competes” with the private sector.
Here is what Kamarck writes about this competition:
Some argue that the Post Office should get into more new lines of business – from delivering groceries to teaming up with retailers to deliver packages on the same day they are ordered. But this raises the thorny question of subsidies. To what extent do the U.S. government subsidies for the USPS create an unfair playing field for all those who are already in the private market place delivering everything from groceries to clothing?
The monopoly the USPS enjoys in the areas of mail delivery and mailboxes, as well as a host of other advantages, including tax subsidies, preferential interest rates on borrowing, and extensive real estate, means that when the USPS competes with the private sector, it enjoys an unfair subsidy. According to a recent study, these monopoly rights and privileges add up to an estimated $18 billion dollars in special annual savings and subsidies for the postal system.
Why yes, We the People could do a great job of providing these things for ourselves, if we were allowed to. But that would “unfairly compete” with those who want to profit of off doing those things, while only doing them for people who have enough money to pay for them.
The USPS is financially hobbled. It is essential public infrastructure, but does not receive appropriations from Congress and is required to “make money” off of serving the public. But it also has to pre-fund the benefits of employees so far into the future that it is setting aside money for possible employees who are not even born yet.
The USPS is also hobbled by preventing it from doing things it could be doing to serve the public. With offices in almost every community in the country, the USPS could offer public banking to serve the millions of Americans who do not have bank accounts and cannot cash and write checks or use ATMs. (Here’s an idea for serving the public: This bank could even offer insured retirement savings accounts, perhaps up to $250,000, and with some money from Congress could pay maybe 3% above market interest rates.)
The USPS could also serve the public by providing low-priced, super-fast fiber internet — and even cell service. It could even provide low-price cable TV services. But currently it is prevented from doing these things because it would “unfairly compete” with the private Internet and cell and cable providers who as we all can see are serving the public so well by delivering super-fast and low-cost (and fee-free) internet and cell and cable — all with absolutely first-class customer service! (HA!)
USPS A Major Employer, Providing Benefits
Here is an important part of this whole equation: The USPS is a major, major employer – the second largest employer in the United States after Walmart. The USPS should serve as a model employer, pay great wages, provide great benefits and be a great place to work. This is what We the People of the United States would want everyone to have at their job and what We the People should provide when it is up to us.
But corporate-funded, anti-government politicians again and again “save money” by forcing “efficiency” in the number, pay and benefits of public employees, or by just outsourcing their jobs. The outsourced companies hire at near-or-minimum wage with few-or-no benefits (so they can pay a few at the top astonishing amounts). This loss of good-paying jobs combined with the low wages of the replacements creates a strain on local communities that often have to provide assistance. Then, of course, the anti-government ideologues complain that government is providing “handouts.”
Never mind the subsidies private employers like Walmart get from us because they pay so little that the public has to provide public assistance to make up the difference so their employees can even eat. (Meanwhile the Walton family has more wealth than the bottom 40 percent of Americanscombined.)
If the USPS is partially or completely privatized, employees will be moved into low-wage positions with little or no benefits, working longer hours. Their communities would suffer as they cut back from spending and paying taxes, homes are foreclosed, public assistance is needed and problems of poverty start to appear. This is not what We the People want for our society, but this is what would occur.
Here is the privatizer’s playbook: Create a crisis and then offer “solutions” that fit their agenda. Make government not work and then say that because government doesn’t work we should get rid of it. In USPS’ case, engineer a requirement that the USPS “make money” instead of receiving government appropriations. Then hobble its ability to do that. When service is cut back, complain that it isn’t doing a very good job and complain that it should be privatized because it is “going broke.” (You may have also heard that Social Security is “going broke.” However, you may not have heard that the military is not “making money” and is “going broke.”)
When a full-on frontal assault fails, offer incremental steps that lead to eventual total privatization or dismantlement. Break it into pieces, leaving guaranteed failure behind.
Of course, never, never mention that Congress could just appropriate money as needed for the USPS, and that the USPS could take advantage of its impressive national infrastructure to expand into new areas that serve public needs.
These obvious and simple solutions do not fit the privatization agenda. Instead, define the problem in other ways that lead to the desired solution. This is what they do, and this is what we are seeing here.
Note that FedEx is in the “Honor Roll of Contributors” to the Brookings Institution. Meanwhile, another Brookings item calls the USPS “a hopelessly retrograde enterprise.” Writes Kevin R. Kosar, “To be clear, the Postal Service cannot be abolished; at least, not immediately. … But a day of reckoning must come.”
When that so-called “day of reckoning” comes, will We the People who benefit from all of the services that the USPS does provide and could provide end up being delivered a bill of goods?